Health Care Reform:

Medicare Part D Prescription Drug Plans

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Your deductible and all co-payments paid that year count toward that $4,750 limit. However, your monthly premiums do not.

Keep in mind, many seniors will never need to spend $4,750, because they don't use expensive drugs. Also, not all plans work like this. Plans differ in terms of their deductibles, co-payments, and coverage in the "doughnut hole." This coverage gap is an important consideration when choosing your Medicare Prescription Drug Plan.

Remember that Medicare Prescription Drug Plans vary a great deal. Once you sign up, it might be a year before you can make changes. So be very careful when choosing a plan. Here are some things to consider:

• Make sure that the drugs you need are covered by the plan. Be thorough and check the details. Even if a drug is listed, it might not be covered at the dose and quantity you need. Or, the plan may require you to get prior authorization from your doctor before it will cover that drug. If drugs you need aren't listed, talk to your doctor. Your doctor may be able to prescribe different medicines that will work as well.
• Compare the costs. The deductibles, premiums, and co-pays/co-insurance for plans will be different. 
• Check the pharmacies. Some plans will only work with certain pharmacies. So make sure that the pharmacy that you use -- or another one nearby -- is listed.  Also, many plans allow your drugs to be delivered by mail.

Some people with low incomes and limited assets are given Extra Help to pay for their Medicare Prescription Drug Plan. If you qualify, you may not have to pay the monthly fee and your co-payments will be cheaper when you buy drugs. These plans do not have a coverage gap, or "doughnut hole."

If your yearly income is less than $16,335 (single) or $22,065 (married) and your resources -- not including your car and home -- in 2012 are less than $12,640 (single) or $25,260 (married), you may be qualified. People with the lowest incomes and fewest resources get the most help.

You may get an application for Extra Help in the mail. Or you can apply by calling Social Security at 800-772-1213 or using its online application.

People automatically qualify for Extra Help if they are "dual eligibles" (they have both Medicare and Medicaid), get help from Medicaid in paying Medicare Part B premiums, or get Supplemental Security Income.

Remember: Even if you don't have a low income or limited assets, you can still join a Medicare Prescription Drug Plan.

• It's best to sign up during your initial enrollment period -- the three months before and three months after the month when you turn 65. If you don't and enroll later, you may pay a penalty in the form of higher monthly payments. You have between Oct. 15 and Dec. 7 to join or switch to a different plan, without penalty. You may also join a 5-star-rated Medicare Prescription Drug Plan at any time, without paying extra. Otherwise, you may pay a penalty in the form of higher monthly payments. So even if you don't need the drug coverage right now, you might still choose to sign up for it, anyway, to avoid this penalty in the future. There are exceptions. If you have drug coverage now that is as good as Medicare's or better, you shouldn't be charged a late penalty if you sign up later. Call your insurance company for more information.
• If you have a Medicare Advantage plan that has prescription drug coverage, you can't sign up for a separate Medicare Prescription Drug Plan. That's because you should be able to get your drug costs covered by your Medicare Advantage plan.
• If you have coverage from an employer or a union already, compare your current policy with the Medicare Prescription Drug Plans. Remember, if you drop your current plan, you might not be able to get it back. So don't make any hasty decisions.

For more information about Medicare Prescription Drug Plans, see the Medicare web site at www.medicare.gov or call 800-MEDICARE.